Former Timberwolves CEO wins silica sand court battles
RED WING — The Minnesota Timberwolves' first president and CEO recently won two court battles in Goodhue County that could be worth millions in silica sand.
Bob Stein filed a lawsuit in March 2011 alleging that he'd been improperly cut out of a land deal after Windsor Permian purchased 94 acres near Red Wing for $1.5 million. The Oklahoma-based energy company expressed a desire to create the county's first silica sand mine, prompting a moratorium on such mines and sparking regional debate.
Silica sand is a critical component in the booming hydraulic fracturing process used in North Dakota oil fields, and elsewhere. Fracking is used to extract natural gas and oil that had been trapped in rock, but the mining of silica sand and the "fracking" process have been criticized by environmentalists.
Stein, a Twin Cities attorney, has argued that he had a binding Mineral Development Agreement in place with Scott and Susan Wesch — signed Feb. 2, 2009 — prior to the sale taking place with Windsor Permian for well above market value. The Wesches attempted to terminate the contract weeks before filing paperwork with the county.
After more than two years of legal arguments, Goodhue County District Court Judge Kevin Mark issued a declaratory judgement on April 3, 2013, ruling that Stein's contract with the Wesch family was still binding and would be transferred with the land during the purchase. As such, Stein is now entitled to half of the silica sand proceeds.
Conservative estimates suggest that the Hay Creek site contains 23 million tons of high-quality silica sand, which is projected to be worth more than $2 billion.
That ruling set the stage for last week's four-day jury trial, which ended Friday with the jury ruling that Windsor Permian and its subsidiaries had intentionally interfered with Stein's contract with the Wesches.
Another trial, which hasn't been scheduled, must now be held to determine what damages the energy company owes Stein. In previous court filings, Stein has sought more than $50,000 in damages, the most allowable in civil cases.
"For two years, the defendants have been fighting our claim that the contract ran with the land," said Rick Lind, Stein's legal counsel. "My client was pleased with the verdict and the job the jury did, and looks forward to determining how much he was damaged."
Calls to attorneys representing Windsor Permian were not returned. It's unclear if the silica sand mine would still be economically viable after Stein collects his share.
Goodhue County's moratorium on silica sand mining is set to expire in September, though it could be extended for a third straight year.